After almost four months of lockdown, the Mexican Patent and Trademark Office (MPTO) restarted activities at its physical premises.

The lockdown started on March 24 and ended on July 12, 2020. All deadlines due between March 24 and July 12 were extended to July 13, 2020. Further, all terms calculated in days were suspended during the lockdown, and started running again on July 13.

Notwithstanding the above, the MPTO enabled a “buffer” period in the previous week (July 6 to July 10) to allow applicants to file all sorts of documents in paper at the window of the MPTO, and avoid unmanageable crowds on the first business day.

The MPTO was busy during the lockdown: It enabled new online systems to encourage e-filings, instead of the traditional paper filing at the window of the MPTO. According to the rules of the lockdown, documents and applications filed online and at the window in the “buffer” week during the lockdown, will have as official filing date July 13, 2020. In the case of new applications, since all of them will have July 13, 2020, as filing date, priority will be set according to the serial number of the new applications.

New Federal Law for the Protection of Industrial Property

The new Federal Law for the Protection of Industrial Property (FLIP) was published in the Official Journal of the Federation on July 1st, 2020. It will enter into force on November 5, 2020 and will substitute the current Industrial Property Law (old IPL) enacted in 1991. However the old IPL and the FLIP will coexist for some time.

The main purpose of the new legislation was incorporating the more recent commercial agreements Mexico has signed, especially the United States Mexico Canada Agreement (USMCA). Nevertheless, Mexican law states that a provision stated in an international treaty, such as the USMCA, may be applicable directly in favor of an individual or entity if it stipulates a specific right in benefit of such an individual or entity, even in the absence of local legislation.

The new law provides a more coherent and better structured legislation, not entirely free of some inconsistencies and voids.

FLIP also incorporates some practical guidelines already set by the examiners of the MPTO during the last years, giving applicants mores certainty in some fields of patent and trademark examination.

Pending of new Rules, the Rules of old the IPL will continue in force.

FLIP incorporates most of the 2018 amendments to the IPL. There are substantive changes in the fields of trademarks and industrial designs, but the most relevant changes are in patents and enforcement.

This article will mainly highlight the changes between the old IPL and the new FLIP, rather than making a comprehensive explanation about the new legislation. Future articles and updates will discuss specific issues in FLIP.

A. Inventions

A.1. Double patenting is now expressly forbidden (article 50 FLIP).

A.2. Explicit acknowledgement of patentability of microorganisms and biological material that has been isolated of its natural environment and obtained through a technical procedure (article 49 FLIP).

A.3. Inventions that may put people’s or animals’ life or health at risk, including inventions related to human cloning, human genetic material o the industrial or commercial use of human embryos, may not be patented (article 49 FLIP).

A.4. The Roche-Bolar defense is now part of the statute, without a time limit. A patent may not be enforced against a third party that uses, makes, offers in sale or imports a product claimed in a patent, only if such activities are aimed to generate tests, data and experimental production required to obtain a marketing authorization of a medicine for human health (article 57, paragraph II, FLIP). This defense was already stipulated in the Rules of Health Supplies.

A.5. Patents cannot be extended; the term is still 20 years counted from the filing date. However, the rights provided by a patent may be extended up for five years by means of a Supplementary Certificate, if there was an unreasonable delay in the grant of the patent (articles 126 to 136 FLIP).

A.6. Clearer and more comprehensive rules for divisional patent applications, especially voluntary divisional applications. The new law provides an extremely broad authority for the MPTO to decide if it accepts a divisional application from an already divided application (articles 100 and 102 FLIP).

A.7. Claims may not be constructed beyond the subject matter protected by the patent (article 55 FLIP).

A.8. The new term of utility models will be 15 years counted from the filing date, instead of 10 years (article 62 FLIP).

A.9. The causes to invalidate a patent have been limited to the cases expressly stated in the new statute. There is no statute of limitations to file an invalidation action against a patent (article 154 FLIP).

A.10. Detailed rules and procedure to request the limitation of the rights provided by a patent or correct mistakes (articles 121 a 125 FLIP).

A.11. Software is still not considered an invention, but in itself (article 47, paragraph V, FLIP).

A.12. FLIP provides a twelve-month grace period for inventions disclosed directly or indirectly by the inventor or the assignee and also by third parties that obtained the disclosed information from the inventor or the assignee. Such a disclosure would not affect the novelty of the invention.

B. Distinctive signs

B.1. The term of registered trademarks –including collective and certification marks-, registered slogans and tradenames, will be ten years counted from the date of registration or publication, instead of ten years from the filing date (articles 178, 204 and 211, FLIP).

B.2. Instead of a formal and substantive examination, there is now a single exam (article 225 FLIP).

B.3. The description of goods or services in a trademark application has to be determined and specific. We still do not know if multiple-class applications will be accepted; the Rules of FLIP will stipulate it (articles 176 FLIP and 57, paragraph I, of the Rules of the old IPL).

B.4. Oppositions. The consequences of filing oppositions are more serous now for all involved parties:

B.4.a. Unsuccessful oppositions will cause the opponent losing the right to file an invalidation action, using the same arguments and evidence, against the opposed trademark after its registration (article 259 FLIP).

B.4.b. The trademark applicant will have two months to answer the opposition and file all the evidence to support the right to the trademark. If the applicant does not answer the opposition, the trademark application will become abandoned (article 225 FLIP).

B.5. The MPTO may start ex officio an invalidation action against a trademark that identifies a product that, being subject of some regulation or specific legislation, breaks the applicable rules or provisions (article 178 FLIP). It is a new and odd provision, that stipulates losing trademark rights as a penalty due the infringement of laws or regulations not related whatsoever to the trademark.

B.6. Trademark coexistence agreements and letters of consent are still binding for the MPTO, but there are some changes. FLIP now provides that consent and coexistence agreements are acceptable for identical or confusingly similar trademarks to identify similar goods or services (article 123 FLIP). The consent is no longer valid to overcome the anticipation if the trademarks cover the same goods or services.

B.7. Declarations of actual and effective use. Trademark owners must file a declaration of actual and effective use after when renewing and after the third anniversary of issuance of the registration. The transitory articles of FLIP clarified that the burden of filing the declaration of use after the third year is due only for registrations issued on August 10, 2018, and thereafter. If the declaration of use were not filed when renewing, as it will happen with International Trademark Registrations issued according the Madrid Protocol, the MPTO will issue an office action requesting such a declaration within a two-month term (article 237 FLIP). These are very good news for Madrid trademark owners, although we do not know how the MPTO will notify such a request: (i) through a notice to WIPO; or (ii) through a notification in the Official Gazette.

B.8. FLIP now expressly provides that the goods or services described in trademark registrations shall be limited to the ones stated in the declarations of actual and effective use (articles 233 and 237 FLIP).

B.10. FLIP will allow partial cancellation and invalidation actions, so the invalidation or cancellation may affect only some of the goods or services listed in the registration (articles 258, paragraphs II and IV; 260, paragraph II, FLIP).

B.10. FLIP gave a blow to the date of first use, by stating that a trademark may be invalidated if the right holder does not prove that the date of first use stated in the trademark application is true (article 258, paragraph III, FLIP).

C. Appeals of Origin

C.1. FLIP regulates appeals of origin and geographical designations. However, FLIP defines the appeal or origin in a weird way: “a product linked to the geographical area it comes from, if its quality, characteristics or reputation are exclusively or essentially because the geographical origin of the raw materials and production process and the natural and human factors that influence the product”. FLIP should have defined the appeal of origin as a geographical name used to name a product originated from such area, not as a product. This change in the statute increases the differences between the Mexican legislation and rules about appeals of origin and the Lisbon Arrangement.

D. Contentious procedures

D.1. Now there is a limited list of causes that may lead to the invalidation of a Mexican patent. There is no general cause of invalidation of a patent and a patent may not be invalidated due procedural flaws during the examination of the application. (articles 154 y 258, paragraph I, FLIP).

D.2. FLIP now stipulates that the invalidation of a trademark registration has retroactive effects. And the cancellation due lack of use has consequences from the date the decision is issued. The invalidation of a patent also has retroactive effects, but such consequence was already provided in the old IPL. (article 159 and 263, FLIP).

D.3. FLIP now provides rules for a conciliatory procedure to try to settle infringement actions (articles 372 to 385, FLIP).

D.4. Manufacturing, offering in sale, transporting, storing, distributing, importing and exporting goods or services identified with a trademark or incorporating an utility model, industrial design or layout design (topography) is considered “use” of such trademark, utility model, industrial design or layout topography design and, if not authorized, a cause of infringement. It is no longer required proving that the infringer knew that the registered trademark, utility model, industrial design or layout topography design was illegally used. (Articles 386, paragraphs IX, X, XI, XIII, XVII and XXI, and 387, FLIP). These new provisions significantly increase the potential liability of retailers.

D.5. Offering in sale patented goods or goods that were obtained using  a patented process, without authorization, is an infringement, even if the infringer did not know about the patent rights (article 386, paragraphs VI and VIII, FLIP).

D.6. The MPTO has, under FLIP, authority to impose and collect fines, as a tax authority (articles 5°, paragraph VI, and 393, FLIP).

D.7. FLIP provides that he MPTO has authority to calculate and award damages and loses after issuing an infringement decision (article 396, paragraph I, FLIP).The MPTO may not award attorney’s fees. The MPTO’s decision awarding damages or loses has to be enforced by a court of common jurisdiction.

D.8. Under FLIP, the owner of a registered trademark or patent, and the licensee, may claim with a court of common jurisdiction damages and loses from due the illegal use of the trademark or patent, without a prior infringement decision from the MPTO (article 396, paragraph II, FLIP).

D.9. FLIP, and the old IPL, provides punitive damages and loses, and different ways to calculate it. Under FLIP, the minimum amount of the punitive damages would be the equivalent of the 40% of the “legitimate value index”. Different sources may be used to set the legitimate value index: the retail price of the legitimate goods, the profits that the rights holder lost, the profits earned by the infringer or the commercial value of a contractual license. (article 396, paragraphs I, II, III y IV, FLIP).

In any case, the plaintiff would have to prove it suffered an actual damage or loses and the consequential link between the infringement and such actual damages or loses.

D.10. The courts are authorized to enforce the preliminary measures provided in FLIP and the international treaties (article 408, paragraph I, FLIP).

D.11. The alleged infringer may ask the MPTO or the court to lift the preliminary measures by filing a counterbond but, under FLIP, the MPTO or the judge must evaluate the prima facie affected IP rights, the possible harm that the preliminary measures and the lifting of the preliminary measures may cause to the IP owner and the alleged infringer and the impact on public good before deciding. There is no “cap” for the amount of the counterbond, as in the old IPL (article 346 FLIP).

E. Contracts regulated by FLIP

E.1. Licenses. There is no need to record the license so the use of the trademark or patent is deemed as performed by the right holder (articles 138 and 240, FLIP), as stated in TMEC. No license recordal is required either to allow the licensee file infringement actions against third parties (unless the license expressly states otherwise). The law does not state either that the recordation of the license is necessary to the license becomes enforceable against third parties, such as good faith assignees.

E.2. Creditors and beneficiaries of securities and guarantees recorded with the MPTO are entitled to file the application for the renewal of the trademark registration without filing the declaration of actual and effective use. The law is silent about if creditors and beneficiaries of securities affecting patents, industrial designs, utility models and layout topography designs are entitled to pay maintenance annuities.